Biodiesel Tax Credit

For more than ten years, Congress has provided entities that blend biodiesel and renewable diesel into the diesel fuel supply a $1.00/gallon tax credit. The objectives of providing a tax credit for biodiesel are to reduce U.S. dependence upon petroleum-based products by incentivizing use of renewable fuels in the United States and achieve improvements in air quality by incorporating into diesel fuel a component with more attractive emissions characteristics.

Due to inaction by Congress, the tax credit expired at the end of 2016. NATSO is advocating that Congress extend the biodiesel blenders’ tax credit.

At the same time, certain lawmakers and interest groups are pursuing legislation that would replace the biodiesel blenders’ credit with a biodiesel producer credit. NATSO strongly opposes this policy shift, as it would result in fuel retailers paying a higher price for biodiesel that inevitably would be passed down to consumers in the form of higher prices at the pump. This would lead to less biodiesel consumption in the United States, and hinder the United States’ efforts to utilize cleaner burning fuels.

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NATSO today joined nine trade associations in urging Congress to pass a multiyear extension of the biodiesel blenders' tax credit in a joint letter representing producers and marketers of renewable fuels.

Incoming Senate Finance Chairman Chuck Grassley (R-Iowa) told Politico that he has "very little interest in the Ways and Means Committee" for tax extenders, "except maybe for a couple," which could include the biodiesel tax credit.

NATSO joined nearly 60 organizations representing a variety of business, energy, transportation, and agriculture stakeholders in urging Congress to renew expired tax incentives through the end of 2019 before the 115th Congress adjourns.

NATSO on June 25 along with all major associations representing the biodiesel supply chain united in urging House and Senate Leaders and the two key tax writing committees to extend the $1 per gallon biodiesel blender’s tax credit as well as to seek a permanent tax incentive that will help foster growth in the domestic biodiesel market.